(Picture: Neptune in Virginia Beach)
Strategy 4 Saturday Blog (<4 minute read)
Virginia Beach
Standing In front of the 34-foot statue of King Neptune in Virginia Beach, I was truly impressed. The sculpture was designed by Paul DiPasquale depicting the mythical God, Neptune. Neptune with his back to the sea, trident in hand, overlooks the boardwalk. Imagine being able to hire a Neptune as one of your managers. All employees would follow Neptune’s leadership or face the wrath of his trident. You would not have to train him, he would simply know what to do, and guide you in the right direction. As business and private equity owners try to hire the perfect candidate to be their operator, the perfect candidate does not exist. Matter of fact, despite billions of dollars trying to lure the best candidates, our results are less than 50%.
Quality Management Team
As I was in a strategic facilitation in the area, I was struck by this coincidence. Despite the growing value of AI, we still require great leadership and talent throughout the organization to increase the value of the company. Many private equity owners will pay more for companies, when a quality management team is in place. But why is it so difficult especially when your people are typically the most expensive (and potentially valuable) part of your company.
A great hire can be the difference of whether your company succeeds or not.
I have heard more than once, “If I have to hire someone and I still have to do the job, why did I hire them in the first place? Often, this occurs when an organization does not have a robust training program and clear processes in place. They are more likely a small-to-midsize business. They are looking for people to take over that position because there are not clear processes, and potentially dated software. With a strong hiring process and effective training, it can feel more comfortable to bring on talent, which can be trained to do the task that you need them to do.
A poor hire can put you in an expensive dilemma. Not only can it lead to frustration, but there is a potential risk of liabilities if you have to terminate them. With the billions that are spent on hiring the greatest talent in the world, a study by the Society for Human Resource Management still finds that there is only a 43% success rate, despite all the effort to try to get it right.
Hiring Good Talent is Challenging
We have to be aware of that upfront. Hiring good talent is challenging, and we should have patience with the process. Even a new talented hire is going to have to learn your existing company’s processes, systems, and be able to fit into the culture of the company.
The fascinating part is that a lot of companies are adopting AI to improve their hiring processes.
This is a wise decision to adopt AI, however, if you do not reduce your operating expenses, you may not see the monetary benefits unless you become more efficient.
(Picture: $4M Strategies Thumbnail)
So, what can we do differently hiring in a competitive global workforce?
I think it’s extraordinarily important to look at what type of job duties you are looking for a person to accomplish. If you are really clear with those processes and procedures, this will help you make the right decision. If the position is more cyclical in nature (like closing the financial books) it may make more sense to use temporary resources, including offshore resources. You could pay a variable cost as opposed to paying a fixed cost. You can save on the non-value added time you are paying today.
But be careful with any changes, your goal is to improve the process, not just save costs. If a variable resource was ineffective, have you actually saved money? To measure effectiveness, you should look at the benchmark in your industry, revenue per employee.
7 steps when hiring your next team members:
- Be aware of the process and procedures that you want that personnel to complete when they are hired.
- Determine whether those job responsibilities can be absorbed within your existing team.
- Evaluate if those job responsibilities can be automated by your existing team using AI.
- Determine if you can hire temporary resources, or virtual resources, to focus purely on the task and responsibility.
- Higher slowly, assure you have the right culture fit, not just the process and procedures, for any full-time employee that you’re looking to bring on board.
- Recognize that employees typically take 3 to 6 months just to get up and running.
- If an employee gets off to a bad start, is not creating value within 3 to 6 months, and it’s not because of the lack of process and procedures, make a quick decision to transition that person out of the company.
Our focus this week on $4M Strategies is hiring. We have great experts who will share their tips on best practices. I hope you can apply these tips for your next hire unless you are able to convince Neptune to manage your company.
(Picture: $4M Strategies Logo)
Next Week’s Podcast Schedule:
$4M Strategies Podcast Topic: People Hiring
- Mon, 10/21 – JM Ryerson
- Tues, 10/22 – Trey Taylor
- Weds, 10/23 – Ryan Englin
- Thurs, 10/24 –Steve Potestio
- Fri, 10/25 – Carl J Cox
- Tues, 10/22 – Derek Streat
- Thurs, 10/24 – Lubo Smid (re-release)
